WHY DO I NEED A WILL?
Unfortunately one of the certainties in life is death. That's where a Will can be the most important legal document you could have ever executed. If you own property, have children or just want to have a say in how you want your funeral to be organised then a Will is the best way of ensuring that your wishes are carried out after your death.
Any person who has full mental capacity and is aged 18 years or over can make a Will. There are however important legal requirements that have to be followed to ensure that your Will is valid and effectively carries out your wishes on your death. This is where it is important to get appropriate legal advice and at John Gwilliam & Co Ltd we will ensure that any Will that is prepared for you does uphold your wishes as much as the law will allow it. While there are of course free Will kits that you can buy on line and even Will forms you can buy from your local book and stationers store not everyone's circumstances are the same and of course you need to know what you can and can't do to best ensure that your wishes are given appropriate legal recognition on your death. That's our job.
The pitfalls of not having a Will or not getting proper advice before making a Will are best highlighted by three particular cases that we have been involved in.
Jason
Jason was in his twenties and had just purchased his new home. He was single with no children and of course he had a large mortgage on his home. It didn't occur to him that he would need a Will as he didn't think there would be much in his estate at that time to worry about. Unfortunately Jason was tragically killed and what he had forgotten about was that when he had taken out his mortgage with the Bank the Bank had also insisted that he take out life insurance to cover his mortgage. Accordingly when he died he effectively had a mortgage free home.
His death was a shock to his family, in particular his mother with whom he was very close. Jason's father had effectively deserted the family when he was only a baby. He had never had any contact with his father since then. As he had died with no Will it meant that his estate had to be dealt with under the intestacy provisions in our law. That provides that where someone dies without being married, in a civil union or in a de facto relationship and also has no children then their estate is to be divided equally between their parents. You can guess what happened. His father with whom he had had no relationship for over twenty years and also with whom his mother had had no contact for the same amount of time found out about Jason's death and insisted that he share in half of the young man's estate. There is no doubt that if Jason had made a Will he would have ensured that his property would have gone to who he wanted it to go - i.e. to his mother and siblings.
Derek
Derek had remarried. His first marriage had failed and he had children from that first marriage. Accordingly when he entered his second marriage he took appropriate legal advice and he and his second wife, Denise had prepared for them a Contracting Out Agreement under the Property (Relationships) Act 1976 which effectively ensured that each of them would keep as each of their separate property that property that they each had brought into the second marriage. Wills were also prepared for both of them which effectively provided that each would have a life interest in the other's estate and that then on the surviving spouse's death their respective estates would go to each of their respective children. In this respect the Denise also had children of her own. Unfortunately despite a lot of prompting from their lawyer Derek and Denise never properly executed their Wills or their contracting out agreement. As they were of course at that time getting on well with each other they both decided to witness not only each other's Contracting Out Agreement but each other's Will. Under law that made both the Contracting Out Agreement and the Wills invalid.
As life would have it, Derek and Denise unfortunately separated. His lawyer suggested that a new agreement be signed under the Property (Relationships) Act. An agreement was prepared which provided for the family home to be sold and he and Denise to each get their half share. The Agreement however was never executed, although the house was sold and they each did receive their half share.
Some year's later Derek developed terminal cancer and subsequently died. No valid Will was able to be found for him and of course the earlier one that he had signed and had been witnessed by Denise was invalid. Accordingly his estate had to be dealt with again under the intestacy provisions in our law. Those provisions provide that where someone is still married (even if they have in fact separated) then their spouse is entitled to the bulk of the estate and in fact if the estate is a small one (in this case under $150,000.00) the spouse is effectively entitled to the whole estate. In this case there being no valid Will and no enforceable Relationship Property Agreement Denise as his legal spouse was entitled to claim his whole estate. This was despite the fact that Denise had been separated from Derek for some time and that they had already effectively divided their relationship property between them. That meant that Derek's children were effectively excluded from inheriting anything from his estate.
Mary
In this case Mary did have a valid Will but without getting proper advice found that her Will did not carry out her wishes in the way that she thought that it would.
Mary had been widowed and had remarried Ted. Ted was also a widower and they each had their own children. Accordingly they each wanted to ensure that their respective children would ultimately inherit their estates but that while the other spouse was still alive that spouse would have the benefit of their estate. Accordingly Wills were prepared to reflect what they each thought would carry out these wishes. Each had put in their Will that they were going to leave a life interest to each other and that then upon the death of the surviving spouse their estate would be divided equally between Mary's children and Ted's children.
Unfortunately what they both had not taken into account was that when one of them dies the surviving spouse is of course free also themselves to remarry or indeed enter into another de facto relationship or a civil union. Furthermore unless there is something put in their respective Wills the surviving spouse is of course free at any time to change their Will after the first of them dies.
Mary subsequently died and of course Ted continued to have a life interest in her estate. As one can imagine however Ted who had already lost two wives himself became lonely and he entered into a de facto relationship with a third woman, Betty. Ted then himself died.
Even though Ted had not changed his Will Betty was entitled to claim on the estate either under the relationship property legislation or under the Family Protection Act 1955. She did just that. The Court said she was entitled to half of Ted's estate. Therefore Ted's children and Mary's children only got a 25% share each.
What therefore had started out on the face of it as a sensible solution to ensure that Mary's children ultimately inherited her estate fell well short of that. The end result was that her own children received only 50% of her estate and only 25% of Ted's estate. Matters could have so easily been avoided if she had simply provided in her Will for all of her estate on Ted's death to go to her children and for Ted to provide in his Will that on Mary's death all of his estate would go to his children.
The Moral of these Stories
The moral of these stories, make sure you have a valid Will and make sure you get proper legal advice before you execute a Will. At John Gwilliam & Co Limited we firmly believe that Wills are the most important legal document that you can sign. They can be relatively cheap to prepare and yet can avoid so many problems occurring after your death. Your families of course have enough to contend with when they are grieving over your death and they do not want to have the added burden of finding your wishes not been given proper effect to or having to contend with completing claims on your estate.
If you are a first home buyer and you are buying your home through John Gwilliam & Co Limited we will prepare a Will and ensure that it is validly executed all at no cost to you. It is our way of ensuring as best we can that now you own a substantial asset such as your home your wishes are given effect to on your death.
WHAT ARE ENDURING POWERS OF ATTORNEY?
If Wills are the most important legal document you can execute during your life then we would say that Enduring Powers of Attorney are the second most important. They are relatively straight forward documents that ensure that there is someone either within your family or a professional person who can look after your affairs should you lose mental capacity.
While of course everyone likes to think that when they do die it will be quick the reality is that as our population ages and as modern medical treatments improve we are living longer and the chances of losing mental capacity are that much greater. Also, at any age one can be struck down by a serious illness or involved in a serious accident leaving you mentally impaired.
There are two kinds of Enduring Powers of Attorney : one for personal care and welfare and the other for property.
Personal Care and Welfare
The person who you appoint as your attorney for personal care and welfare would be responsible for making decisions about where you live, consenting to medical treatment and even make decisions about what clothes you wear. Such a power of attorney can of course only be used if you lose mental capacity. Such attorneys however cannot consent to your marriage or civil union or to the adoption out of a child. Neither can that attorney refuse consent to medical treatment (e.g. pull the plug on your life support system). You can only appoint one person at a time to be your attorney for personal care and welfare but you can of course appoint substitute attorneys - i.e. someone to act in place of the attorney you have chosen if that attorney were to die or was unwilling or unable for some reason to act as your attorney.
Property
Powers of attorney in respect of property are probably more important from a legal point of view. This is the person who you would appoint to deal with things like your bank accounts and buying or selling any property on your behalf. These powers of attorney can be "open" or "closed". An open power of attorney means that the person you appoint as your property power of attorney can use that power of attorney at any time whereas a closed power of attorney can only be used when you lose mental capacity.
You can appoint more than one person to be your attorneys for property matters and such attorneys can have joint or several authority (i.e. you can require that both attorneys have to agree before anything can be done or you can provide that either attorney on their own can act on your behalf). You can also provide in the power of attorney for those circumstances in which that attorney can benefit themselves or others (including minor children). The normal rule of course is that if you do not provide for this in the power of attorney then the attorney is not entitled in law to benefit themselves or others. They can only use their powers under the power of attorney for the benefit of yourself.
Other Options
Any powers of attorney whether they are for personal care and welfare or property can be general or restricted to certain items of property or for certain purposes. You can also provide in your power of attorney who it is you want to certify whether or not you lack mental capacity so as to activate the power of attorney and with whom you want the attorney to consult or provide information before exercising their powers.
At John Gwilliam & Co Limited whenever people are looking to make a Will we also advise them about Enduring Powers of Attorney and the importance of having these in place as well. Like Wills Enduring Powers of Attorney can be changed at any time provided you continue to have mental capacity. At the end of the day they are a kind of insurance policy so that if you should lose mental capacity there is someone you trust who will ensure that you are properly looked after and that your wishes continue to be carried out. If you were to lose mental capacity without having valid enduring powers of attorney the Family Court can appoint a property manager or welfare guardian for you. The problem with this is that it is expensive and time consuming. Also, the Court may appoint someone that you wouldn't necessarily have chosen yourself to carry out your wishes.
